Johnson Controls explores sale of auto-electronics division
Supplier denies report of interiors-unit divestiture
DETROIT -- Johnson Controls Inc. said it has hired JP Morgan to explore the potential sale of its automotive electronics unit and denied having plans to sell its interiors business.
"The company is in the preliminary stages of this process," JCI said in a statement today.
Johnson Controls issued the statement in response to a Reuters report saying JCI was looking to sell its automotive interiors division.
JCI "has no current intention to divest this segment," the statement said.
Shares of Johnson Controls earlier in the day were trading up about 6 percent at $33.68 on the New York Stock Exchange, but fell after JCI issued the statement, closing the day up 2.6 percent at $32.63.
Johnson Controls, the largest U.S.-based auto supplier, with sales of more than $4 billion in car interiors for fiscal 2012, has grappled with industry-wide pressure on margins, low vehicle production in Europe and increased competition from China.
Johnson Controls posted total revenue of $42 billion its last fiscal year. Automotive seating remains its largest segment with roughly $16 billion in sales for its fiscal 2012 that ended in September.
In October, Johnson Controls separated its car seating from its interiors and electronics businesses, saying that economic and competitive characteristics between seating, interiors and electronics are "increasingly different."
"If you look at those businesses, the business models, capital intensity, the manufacturing footprint requirements are very, very different. And we also wanted to bring more focus to each of those segments," CEO Steve Roell said at that time.
Reuters contributed to this report.Contact Automotive News